Identification of On-site Challenges and Regulations of Local Companies over Two Days on the 18th and 19th
The Korea International Trade Association (KITA, Chairman Gu Ja-yeol) is holding the 'Regulatory Improvement Task Discovery Meeting' on the 18th at the Busan Small and Medium Venture Business Administration.
[Asia Economy Reporter Park Sun-mi] #. Company A, located in Gyeongbuk region, which independently produces and exports display materials based on advanced technology, was recently selected as a key material partner by a major domestic conglomerate. To respond to increasing order demands, the company is considering moving into an industrial complex and expanding its factory, but is facing difficulties due to regulations. Although Company A falls under the advanced industry category according to the five-digit sub-classification of the Korean Standard Industrial Classification as ‘Manufacture of dyes, prepared inorganic pigments, plasticizers, and other coloring materials (20132)’, it is included in the restricted industries for industrial complex entry under the two-digit middle classification as ‘Manufacture of chemicals and chemical products (20)’.
#. Company B, which exports pollution reduction devices for ships, has developed its own hydrogen utilization technology and products through active investment, but has not met the criteria based on sales and R&D investment ratios, thus failing to be selected as a hydrogen-specialized company and unable to receive related support and benefits.
The Korea International Trade Association (KITA) announced on the 19th that it held ‘Regulation Improvement Meetings’ in Busan and Daegu to support companies facing restrictions on entering industrial complexes or difficulties in fostering new industries due to hidden government regulations. Fourteen companies from Busan and Daegu·Gyeongbuk regions attending the meetings voiced various regulatory issues and difficulties related to location, new industry development, customs clearance, and more.
The government introduced a negative regulation system in 2020 by revising the Enforcement Decree of the ‘Industrial Cluster Activation and Factory Establishment Act (SanJip Act)’, allowing all industries except certain sectors like construction to enter industrial complexes. However, local governments and management corporations still strictly regulate eligible industries and qualifications in their basic industrial complex management plans.
There is also a strong industry demand to relax the certification criteria for eco-friendly hydrogen-specialized companies. Currently, the government operates a system issuing ‘Hydrogen Specialized Company Certificates’ based on the proportion of hydrogen business sales (or hydrogen-related R&D investment) relative to total company sales. However, smaller companies find it difficult to meet these requirements, making it hard for early-stage companies to receive related benefits. For companies with total sales between 5 billion and less than 10 billion KRW, the hydrogen business sales ratio must be at least 40% or the R&D investment ratio at least 10%.
An industry official stated, “To foster the hydrogen industry ecosystem in line with the carbon neutrality paradigm shift, it is necessary to relax the certification requirements for hydrogen-specialized companies and expand incentives.”
Additionally, in the customs clearance sector, proposals included ‘expanding the recognition scope of ship supplies’ and ‘extending the tax payment deadline when correcting import declarations’, while in the workforce sector, there were suggestions such as ‘reducing the number of allowed workplace changes for foreign workers benefiting from re-entry exceptions.’
Shin Seung-kwan, Executive Director of KITA, said, “This regulation improvement meeting is scheduled to be held nationwide, including Gangwon, Chungcheong, and Jeolla regions, until the end of next month,” adding, “As the government is concentrating all efforts on regulatory innovation, the association will also lead in discovering regulations and resolving difficulties by communicating with our companies on the ground.”
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